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AUSTRALIAN subscription company Blinker, part of online car sales platform HelloCars, is forecasting that the total value of vehicles funded through its dealer-operated subscription “purchase” plans will reach $38 million for the current calendar year based on existing dealer performances.

The company, which opened for business in September last year, recently partnered with Titan DMS and Dealer Solutions which gives Blinker potential access to more than 1000 car dealers nationally.

Blinker said that it can secure 10 per cent of this client base – or 100 dealers – over the next 12 months.

In February, Berwick Motor Group became the first dealer group to sign a partnership with Blinker.

It allows Berwick Motor Group to offer Blinker’s car subscription solution directly to customers through its website, as well as making the service available across the company’s showrooms.

Customers are able to subscribe to cars directly from the Berwick Motor Group website, including brands such as Nissan, Kia, Jeep, Chrysler, SsangYong, Great Wall and Haval.

Blinker differs from other vehicle subscription services in that its business model offers a software platform for dealers to operate their own subscriber services.

Blinker said that since its launch, its dealer-managed car subscription services have already seen some dealers using its subscription management platform achieve “over a hundred customers on subscription plans”.

“The successful uptake has seen one dealership already achieving six-figure monthly recurring revenue – earnings that were not possible prior to the introduction of subscription offerings,” the company said in a statement.

Blinker managing director and co-founder Michael Higgins said there are an increasing number of Australians subscribing, rather than buying, a car.

“The success that our dealer partners have experienced since offering subscription via the Blinker platform shows the changing consumer sentiment toward flexibility and the subscription economy,” he said.

“With the automotive industry in 2019 seeing the lowest car sales in eight years, we expect this trend to continue steadily as more dealerships move to incorporate a subscription-based model together with traditional sales and finance.

“In a few years, a car dealership without a subscription program will be like a real estate agency without a rental property portfolio.”

HelloCars, Blinker Co-founders Michael Higgins (left) and Paul Higgins

Titan DMS became the first distributor for the Blinker platform in the Australian market while Dealer Solutions – part of Cox Automotive – has become Blinker’s first integrated website partner.

Dealer Solutions can offer the subscription model to its network of dealers currently using it as their preferred website partner.

Mr Higgins said that the integrated solution allows consumers to subscribe to a car directly from a dealership’s website without leaving the house, providing them with a fully digital experience.

“The feedback from dealerships has been overwhelmingly positive, and these strategic partnerships we have put into place will make offering car subscription an entirely seamless out-of-the-box experience for dealers and end customers alike,” he said.

He said Blinker is now seeing strong interest from dealers in Perth and Brisbane in volumes similar to that of Sydney and Melbourne.

“This suggests that dealers around the country are not immune to the current car sales decline,” he said.

“The company has also begun to receive requests from consumers wanting to connect with their nearest Blinker dealership, with some customers even seeking to petition their local dealerships to begin offering car subscription with Blinker.

“It’s exciting when members of the public are reaching out to learn more about the platform and eager to see it offered in a dealership close by.

“This kind of consumer-driven demand is how companies like PayPal and Afterpay were able to scale so quickly, so to see it happening with Blinker is extraordinary.”

Blinker is self-funded but Mr Higgins said it was looking at opportunities with partners that would be able to offer strategic growth opportunities in addition to funding.

Blinker started after brothers Michael and Paul Higgins in 2015 launched HelloCars as Australia’s first online-only car dealership, buying and selling used cars exclusively through its website.

In early 2019, HelloCars launched its subscription service after identifying a change toward flexible and affordable alternatives to traditional car ownership.

Blinker was developed in-house for HelloCars.


Note: An earlier version of this report said that Blinker, the operator of the subscription platform used by dealers, would have revenue of $38 million. This has now been corrected to say that Blinker expected its dealers to place approximately $38 million worth of vehicles on to subscriber plans. 

The report also gave the impression that there were more than 100 customers on Blinker subscription plans when in fact some of Blinker’s individual dealer customers have already sold plans to more than 100 of their customers.  This has also been corrected.

 

By Neil Dowling

KPMG
VACC
Schmick